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Officials in all 50 states launch foreclosure probe

WASHINGTON (AP) - Officials in all 50 states and the District of
Columbia -- including Minnesota Attorney General Lori Swanson -- have launched a joint investigation into allegations that
mortgage companies mishandled documents and broke laws in
foreclosing on hundreds of thousands of homeowners.

The states' attorneys general and bank regulators will examine
whether mortgage company employees made false statements or
prepared documents improperly.

Alabama initially did not sign on to the investigation. It
reversed course after the joint statement was released.

Attorneys general have taken the lead in responding to a
nationwide scandal that's called into question the accuracy and
legitimacy of documents that lenders relied on to evict people from
the homes.

"To get virtually every attorney general in this country working in tandem to investigate this problem shows how serious it really is," said Minnesota's Lori Swanson.

Employees of four large lenders have acknowledged in
depositions that they signed off on foreclosure documents without
reading them.

The allegations raise the possibility that foreclosure
proceedings nationwide could be subject to legal challenge. Some
foreclosures could be overturned. More than 2.5 million homes have
been lost to foreclosure since the recession started in December
2007, according to RealtyTrac Inc.

The state officials said they intend to use their investigation
to fix the problems that surfaced in the mortgage industry.

"This is not simply about a glitch in paperwork," said Iowa
Attorney General Tom Miller, who is leading the probe. "It's also
about some companies violating the law and many people losing their
homes."

In a joint statement, the officials said they would review
evidence that legal documents were signed by mortgage company
employees who "did not have personal knowledge of the facts
asserted in the documents." They also said that many of those
documents appear to have been signed without a notary public
witnessing that signature - a violation of most state laws.

"What we have seen are not mere technicalities," said Ohio
Attorney General Richard Cordray. "This is about the private
property rights of homeowners facing foreclosure and the integrity
of our court system, which cannot enter judgments based on
fraudulent evidence."